SEC: Romney CEO During Purchase Of Shares In Chinese Outsourcing Company
(MintPress) – Recent allegations that Republican presidential frontrunner Mitt Romney was involved with Bain Capital during a three-year period in which its companies filed for bankruptcy and laid off workers calls into question the culture of the company the presumed candidate founded in 1984.
While the debate has primarily surrounded whether Romney was directly involved with Bain during his time with the Salt Lake City Olympic Committee, as Security and Exchange Commission (SEC) filings indicate, political pundits and candidates have largely kept their attention away from investments in companies that promoted offshoring jobs before that point.
Investments in offshoring before the Olympics?
Listed on Bain Capital’s website are its affiliate companies, Brookside Capital and Sankaty Advisors — two companies in which Romney was previously named the sole shareholder, sole director, president and Chief Executive Officer (CEO).
According to a SEC filing, Romney held that title in 1998, during a time in which Brookside Fund secured 748,000 shares of Global-Tech Appliances, a manufacturing company based in Hong Kong, China.
“No person other than the respective owner (Mr. W. Mitt Romney) referred to herein of shares of Common Stock is known to have the rights to receive or the power to direct the receipt of dividends from or the proceeds from the sale of such shares of common stock,” the SEC filing states, essentially giving Romney full responsibility and control over shares.
Global-Tech makes its money through companies that offshore their manufacturing to China.
Five months after the acquisition by Romney, through Brookside Capital, the Chinese-based manufacturing company announced it was halting plans to expand its production plant, citing the delay of a deal with Sunbeam Corporation, known for its kitchen, garment care, bedding and general home products, which had previously planned to outsource manufacturing.
“Although it appears that customers such as Sunbeam are not outsourcing their manufacturing as quickly as we had anticipated, we still believe that the long-term trend toward outsourcing will continue,” Global-Tech President and CEO John C. K. Sham said in a press release.
According to Mother Jones, Global-Tech later changes its name to Global-Tech Advanced Innovations.
In 1999, SEC filings show Romney, through Brookside and Sankaty, purchased 9 percent of Global-Tech’s stock. According to Mother Jones, this was after the period of time in which Romney claimed he had cut ties with Bain Capital.
Global-Tech also owns subsidiaries, Lite Array and Global Optics, with a manufacturing plant in Guangdong, China. According to its website, it produces “camera modules for portable devices and mobile phone applications…”
Guangdong, a province of China, isn’t known as a beacon of hope for low-wage workers. In 2005, the Guangdong Labour Authorities condemned 20 sweatshops for violations in China’s labor laws in response to growing concerns. A news story in the China Labour Bulletin did not specifically name the 20 condemned sweatshops, and did not mention Global-Tech or its subsidiary companies. It indicated the crackdown on sweatshops occurred on those “mostly in the construction, textile and electronics industries in cities with high labo(u)r demand, including Guangzhou, Shenzhen, Dongguan, Zhongshan and Huizhou.”
When Mother Jones questioned the Romney campaign about the investments, an aide responded by saying, “It’s my understanding that while Brookside is a part of Bain Capital, it is not a private equity vehicle. Brookside makes passive investments in public stock. They don’t control or manage the companies they invest in. Brookside had a small ownership stake in Global-Tech while Romney was there. If owning shares in a foreign company is somehow wrong, President Obama is guilty as well.”
Romney has repeatedly claimed on the campaign trail that he would stand against incentives and business practices that lead companies to outsource jobs to places like China.
Global-Tech’s third quarter fiscal report for 2012 showed “continued profitability.”
Romney responds for 1999-2002 period
Republican presidential frontrunner Mitt Romney has touted himself as the ultimate businessman throughout the campaign, citing his 25 years of experience in private business, much of which was spent as CEO of Bain, as a testament that he has what it takes to turn the nation’s economy around. He founded the company in 1984.
Now, that very claim has him in hot water.
Romney has repeatedly said that he left Bain Capital in 1999 to pursue a position with the Olympic Committee for the Salt Lake City games, but Security and Exchange Commission (SEC) filings that showed Romney remained Bain’s CEO, president and primary shareholder through 2002.
Romney’s opponents have claimed SEC records muddy the waters for the candidate, making it difficult to decipher the truth.
Yet Romney isn’t changing his tune, accusing the Obama campaign of inaccurately portraying him as an active CEO from 1999 through 2002, pairing him with the outsourcing practices. He doesn’t deny he remained on SEC filings through 2002, but he sticks to claims that he wasn’t directly involved in the company during that time.
This week, he appeared on major news networks, claiming that the latest attacks on his time at Bain Capital are meant to be a distraction from a poor economy and high unemployment rate. He has repeatedly urged the Obama campaign to apologize for claims that Romney lied on SEC filings.
A statement issued to The Boston Globe by Bain Capital backs up the claims:
“Mitt Romney retired from Bain Capital in February 1999. He has had no involvement in the management or investment activities of Bain Capital, or with any of its portfolio companies, since that time”
The issue now is whether he can convince the American public of this, despite the SEC documents that state otherwise.
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